Acquisitions

12 Months Ended

Dec. 31, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Acquisitions

Acquisitions

On September 16, 2024, we acquired Voleatech with cash on hand for €5.0 million ($5.6 million), net of cash acquired and accounted for the acquisition as a business combination. The acquisition includes a potential earn-out up to €3.0 million based upon certain targets over three years, which will be accounted for as compensation cost. Voleatech, based in Germany, is known for their VT AIR Next Gen Firewall and expands Belden's Firewall product portfolio and overall planning of security in OT (Operational Technology) networking. Voleatech is reported within the Automation Solutions segment and is not material to our financial position or results of operations.

On June 30, 2024, we acquired Precision with cash on hand for $289.6 million, net of cash acquired and accounted for the acquisition as a business combination. Precision, based in New York, is a leading supplier of value-added optical transceivers with proprietary software, firmware configurations, and related components. Precision is reported within the Smart Infrastructure Solutions segment.

The following table summarizes the estimated, preliminary fair values of the assets acquired and liabilities assumed for Precision as of the acquisition date (in thousands):

Receivables	$	24,191
Inventory	7,098
Other current assets	1,486
Property, plant and equipment	5,330
Intangible assets	194,100
Goodwill	121,604
Operating lease right-of-use assets	2,731
Total assets acquired	$	356,540
Accounts payable	$	11,662
Accrued liabilities	10,193
Deferred income taxes	42,585
Long-term operating lease liabilities	2,468
Total liabilities assumed	$	66,908
Net assets	$	289,632

The above purchase price allocation is preliminary and subject to revision as additional information about the fair value of individual assets and liabilities becomes available. The preliminary measurement of receivables, inventory, intangible assets, goodwill, deferred income taxes, and other assets and liabilities are subject to change. A change in the estimated fair value of the net assets acquired will change the amount of the purchase price allocated to goodwill. The preliminary fair value of acquired receivables is $24.2 million, which is equivalent to its gross contractual amount. A single estimate of fair value results from a complex series of judgments about future events and uncertainties and relies heavily on estimates and assumptions. If actual results are materially different than the assumptions we used to determine fair value of the assets and liabilities acquired, it is possible that adjustments to the carrying values of such assets and liabilities will have an impact on our net earnings. In particular, the valuation of the customer relationships intangible asset was complex and required significant judgment. We used the multi-period excess earnings method under the income approach to measure the customer relationships intangible asset. The key assumptions utilized in the valuation include discount rates, revenue growth rates, and profitability levels of forecasted results. These assumptions are forward-looking and could be affected by future economic and market conditions.

For purposes of the above allocation, we based our preliminary estimate of the fair values for intangible assets on valuation studies performed by a third party valuation firm. We used various valuation methods including lost income, excess earnings, and relief from royalty to estimate the preliminary fair value of the identifiable intangible assets (Level 3 valuation). Goodwill and other intangible assets reflected above were determined to meet the criteria for recognition apart from tangible assets acquired and liabilities assumed. The goodwill is primarily attributable to the expansion of Belden’s solution selling capabilities, particularly the ability to offer more complete fiber infrastructure solutions. Our tax basis in the acquired goodwill is zero. The intangible assets related to the acquisition consisted of the following:

	Fair Value		Amortization Period
	(In thousands)		(In years)
Intangible assets subject to amortization:
Developed technologies	$	24,700	5.0
Customer relationships	161,900		20.0
Trademarks	3,000		2.5
Non-compete agreements	4,500		5.0
Total intangible assets subject to amortization	$	194,100
Intangible assets not subject to amortization:
Goodwill	$	121,604	n/a
Total intangible assets not subject to amortization	$	121,604
Total intangible assets	$	315,704
Weighted average amortization period			17.5

The amortizable intangible assets reflected in the table above were determined by us to have finite lives. The useful life for the developed technology intangible asset was based on the estimated time that the technology provides us with a competitive advantage and thus approximates the period and pattern of consumption of the intangible asset. The useful life for the customer relationship intangible asset was based on our forecasts of estimated sales from recurring customers. The useful life for the trademarks was based on the period of time we expect to continue to go to market using the trademarks.

In August 2023, we acquired CloudRail GmbH (CloudRail) with cash on hand for $9.2 million, net of cash acquired and accounted for the acquisition as a business combination. CloudRail, based in Mannheim, Germany, specializes in sensor to cloud data solutions allowing end users to quickly connect sensors on their machinery to cloud providers to drive business insights and improve outcomes. The results of CloudRail have been included in our Consolidated Financial Statements from August 31, 2023 and are reported within the Automation Solutions segment. The CloudRail acquisition was not material to our financial position or results of operations.

In April 2023, we acquired Berthold Sichert GmbH (Sichert) with cash on hand for $97.5 million, net of cash acquired and accounted for the acquisition as a business combination. Sichert, based in Berlin, Germany, designs and manufactures a portfolio of polycarbonate street cabinets utilized in outside plant passive optical networks (“PON”) and 5G networks. The results of Sichert have been included in our Consolidated Financial Statements from April 17, 2023 and are reported within the Smart Infrastructure Solutions segment. The Sichert acquisition was not material to our results of operations. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the acquisition date (in thousands):

Receivables	$	5,093
Inventory	7,590
Other current assets	2,733
Property, plant and equipment	13,135
Intangible assets	44,328
Goodwill	32,243
Deferred income taxes	433
Operating lease right-of-use assets	131
Other long-lived assets	4,559
Total assets acquired	$	110,245
Accounts payable	$	1,907
Accrued liabilities	4,283
Deferred income taxes	6,551
Total liabilities assumed	$	12,741
Net assets	$	97,504

The fair value of acquired receivables is $5.1 million, which is equivalent to its gross contractual amount. A single estimate of fair value results from a complex series of judgments about future events and uncertainties and relies heavily on estimates and assumptions. The judgments we have used in estimating the fair values assigned to each class of acquired assets and assumed liabilities could materially affect the results of our operations. For purposes of the above allocation, we based our estimate of the fair values for intangible assets on valuation studies performed by a third party valuation firm. We used various valuation methods including excess earnings, and relief from royalty to estimate the fair value of the identifiable intangible assets (Level 3 valuation). Goodwill and other intangible assets reflected above were determined to meet the criteria for recognition apart from tangible assets acquired and liabilities assumed. The goodwill is primarily attributable to the expansion of broadband product offerings in end-to-end solutions. Our tax basis in the acquired goodwill is zero.

The intangible assets related to the acquisition consisted of the following:

	Fair Value		Amortization Period
	(In thousands)		(In years)
Intangible assets subject to amortization:
Customer relationships	$	41,161	20.0
Trademarks	2,184		7.0
Sales backlog	983		0.2
Total intangible assets subject to amortization	$	44,328
Intangible assets not subject to amortization:
Goodwill	$	32,243	n/a
Total intangible assets not subject to amortization	$	32,243
Total intangible assets	$	76,571
Weighted average amortization period			18.9

The amortizable intangible assets reflected in the table above were determined by us to have finite lives. The useful life for the customer relationship intangible asset was based on our forecasts of estimated sales from recurring customers. The useful life for the trademarks was based on the period of time we expect to continue to go to market using the trademarks.

During 2022, we completed three acquisitions. On January 17, 2022, we acquired Macmon for $41.9 million, net of cash acquired. Macmon, based in Berlin, Germany, is a leading provider of products and services that secure network infrastructure in a variety of mission critical industries. On March 3, 2022, we acquired NetModule for $23.5 million, net of cash acquired. NetModule, based in Bern, Switzerland, is a leading provider of reliable, fast and secure wireless network infrastructures through advanced capabilities in 5G and WiFi6 technologies in a variety of mission critical industries with a strong focus on

mass transit and intelligent traffic systems within the transportation vertical. On April 15, 2022, we acquired CAI for $19.0 million, net of cash acquired. CAI is headquartered in Anniston, Alabama and designs, manufactures, and sells a range of plug-in radio frequency filters used in outside plant hybrid fiber-coax nodes. The results of operations of each acquisition have been included in our results of operations from their respective acquisition dates. The three acquisitions were not material to our consolidated results of operations. Macmon and NetModule are included in the Automation Solutions segment, and CAI is included in the Smart Infrastructure Solutions segment. All three acquisitions were funded with cash on hand and accounted for as a business combination.

Precision and Voleatech collectively constituted approximately 3% and (1%) of our revenues and income before taxes for the year ended December 31, 2024, respectively.

The following table illustrates the unaudited pro forma effect on operating results as if the Precision acquisition had been completed as of January 1, 2023.

		Years Ended December 31,
		2024		2023
	(In thousands, except per share data)
	(Unaudited)
Revenues		$	2,531,820	$	2,640,396
Net income attributable to Belden stockholders		202,947		232,713
Diluted income per share attributable to Belden stockholders		$	4.91	$	5.43

For purposes of the unaudited pro forma disclosures, the year ended December 31, 2023 includes nonrecurring expenses directly attributable to the business combination of $9.4 million and $0.3 million for integration costs and inventory fair value adjustments, respectively.

The above unaudited pro forma financial information is presented for informational purposes only and does not purport to represent what our results of operations would have been had we completed the acquisition on the date assumed, nor is it necessarily indicative of the results that may be expected in future periods. Pro forma adjustments exclude cost savings from any synergies resulting from the acquisition.